Gyroscopic Investing

Browne talked about the PP and preparing against the unthinkable. I know there are cocnerns out there about the DTCC and having shares in street name ie your broker, vs your name. Now I know pulling stock certs is costly and maybe overkill. But I wonder would buying an S&p500 fund directly from a mutual company be safer than buying an ETF in a brokerage account? Would one or the other make the shares more easily identified as in "your name / ownership"

Thanks for your thoughts.

etf's exhibit problems funds don't . we had huge balance problems in some of the flash crashes . one of them had popular etf's like dvy down 35% for a few minutes while markets were down 5% .

normally arbitraging keeps equity etf's close to nav but order imbalances can destroy that at times as we have seen .

There is no such thing as absolute safety, and therefore no reason to pursue it. Instead there is only a series of trade-offs whose relative merits and flaws depend heavily on one's point of view.

one thing i recently realized too is this : brokerage accounts are held in street name , while mutual fund accounts are titled differently .

mutual fund accounts have no sipc or extended insurance . only funds and investments bought through the brokerage account .

from fidelity .

Mutual funds

If you own Fidelity mutual fund shares directly, not through a brokerage account, your investment is in assets that are the property of the funds, not Fidelity. The funds and Fidelity are separate and distinct legal entities. The assets of each Fidelity fund are held by its custodian separate from any other assets belonging to Fidelity or any other fund. Neither Fidelity nor its creditors may access the funds' assets to satisfy financial obligations of Fidelity.
While SIPC and Lloyd’s of London protection applies to brokerage accounts, it does not apply to directly held mutual fund accounts.

it looks like vanguard is the same , only brokerage accounts are insured with sipc or lloyds of london .

vanguard

Securities in your brokerage account are held in custody by Vanguard Brokerage Services, a division of Vanguard Marketing Corporation. Vanguard Marketing Corporation is a member of the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). Explanatory brochure available upon request or at sipc.org External site.
To offer greater protection and security, Vanguard Marketing Corporation has secured additional coverage from certain insurers at Lloyd's of London and London Company Insurers for eligible customers with an aggregate limit of $250 million, incorporating a customer limit of $49.5 million for securities and $1.75 million for cash. Coverage provided by SIPC and certain Lloyd's of London and London Company Insurers does not protect against loss of market value of securities. The policy provided by certain Lloyd's of London and London Company Insurers is subject to its own terms and conditions.


how many actually realize this ???/

I found some good info if anyone is interested

DRS
https://the-international-investor.com/ ... gistration

Free DRS with scottrade
https://advisor.scottrade.com/products- ... -fees.html
https://www.scottrade.com/documents/for ... SysReq.pdf

years ago i had a package of stock certificates i had to get to the broker get lost in shipping . i sold them and owed a whole lot of interest on them by the time they were located .

i will never do that again .

mathjak107 wrote:years ago i had a package of stock certificates i had to get to the broker get lost in shipping . i sold them and owed a whole lot of interest on them by the time they were located .

i will never do that again .

Thank you for sharing. That is a good point about the hassle involved. I guess in a really big collapse we just have to hope gold makes up for everything else.

JimTaylor33 wrote:

mathjak107 wrote:years ago i had a package of stock certificates i had to get to the broker get lost in shipping . i sold them and owed a whole lot of interest on them by the time they were located .

i will never do that again .

Thank you for sharing. That is a good point about the hassle involved. I guess in a really big collapse we just have to hope gold makes up for everything else.

This.

If it comes down to painstakingly tracing the chain-of-custody of paper securities back to each and every individual owner, you're probably fucked even if they do figure out just how much of x security you own, anyways. It would be as futile as figuring out how much Bernie Madoff "owes" you, because in in such a scenario the underlying value of your security has probably been devastated or erased anyways.

Yes, indeed, in many ways gold really is the "secret sauce" of the HBPP.

What I mean to say by that is I'm surprised (dumb-founded, actually) that other asset allocation approaches don't recognize the security against systemic risk that gold provides to any portfolio strategy. I don't care if your portfolio strategy consists of trading pig shit futures: as long as you include gold as a permanent fixture of your asset allocation, you exponentially increase the odds of capital survival in the event that paper security values collapse or the system that enables trading them in the first place ceases to function.

Not too many portfolios can boast that kind of systemic survivability (and yes, that includes portfolios that substitute TIPS for gold)

blue_ruin17 wrote:

JimTaylor33 wrote:

mathjak107 wrote:years ago i had a package of stock certificates i had to get to the broker get lost in shipping . i sold them and owed a whole lot of interest on them by the time they were located .

i will never do that again .

Thank you for sharing. That is a good point about the hassle involved. I guess in a really big collapse we just have to hope gold makes up for everything else.

This.

If it comes down to painstakingly tracing the chain-of-custody of paper securities back to each and every individual owner, you're probably fucked even if they do figure out just how much of x security you own, anyways. It would be as futile as figuring out how much Bernie Madoff "owes" you, because in in such a scenario the underlying value of your security has probably been devastated or erased anyways.

Yes, indeed, in many ways gold really is the "secret sauce" of the HBPP.

What I mean to say by that is I'm surprised (dumb-founded, actually) that other asset allocation approaches don't recognize the security against systemic risk that gold provides to any portfolio strategy. I don't care if your portfolio strategy consists of trading pig shit futures: as long as you include gold as a permanent fixture of your asset allocation, you exponentially increase the odds of capital survival in the event that paper security values collapse or the system that enables trading them in the first place ceases to function.

Not too many portfolios can boast that kind of systemic survivability (and yes, that includes portfolios that substitute TIPS for gold)

Excellent post! I couldn't agree more. The people that laugh at gold or only buy real estate taking on leverage to buy 5 investment properties at once have no idea how exposed they are. I too am shocked that people feel more comfortable in TIPS than gold. To me TIPS are a joke. The government will always under report inflation so you lose no matter what even in good time. In bad times forget about it, you will be totally screwed in TIPS.

Print your statements off once a month or quarter...at least you have some type of proof.

Thanks for all the good discussion and advice. I went ahead and downloaded my statements. Based on what was discussed I think that is about the best we can do short of spending excessive time and money, that in the end could be vulnerable to other risk anyways.

i bet it was quite a surprise for many here to find out that mutual fund accounts and brokerage accounts are insured quite differently .

If you have certificates you can take them to your broker's office in person rather than via the mail. Fidelity, for example, has offices all over the country, although not in every city of course.

But even more important, where can you trade pig shit futures? Or even better, bullshit futures? Those should be very active in this political environment!